Sign up to receive free email alerts when patent applications with chosen keywords are publishedSIGN UP

Abstract:

A system and method for displaying a plurality of profit and risk related
indicators are described. A graphical interface displays and dynamically
updates a plurality of profit/loss (P/L) indicators including a realized,
net, and open indicator. The net and open indicators are based on a
trader's net position and a current market level, while the realized
indicator is based on trader's buys and sells associated with a tradeable
objects. In one embodiment, the plurality of indicators are displayed in
relation to a plurality of money management regions defining a maximum
order quantity and a maximum net position controlling the trader's
trades, so that a trader can quickly determine his current as well as
potential money management parameters. The graphical interface may also
display a plurality of potential risk/gain indicators in relation to a
realized profit indicator so that a trader, before entering an order
having a predetermined order quantity, can view a potential risk/gain in
entering into a predetermined net position in view of potential market
movements.

Claims:

1. A method for money management information for a tradeable object
comprising: displaying, via an output device associated with a processor,
a money management region for a plurality of money management parameters
for controlling submission of a plurality of orders for a tradeable
object to an electronic exchange, the money management region having a
profit axis substantially orthogonal to a quantity axis, where the profit
axis includes a range of profit levels and the quantity axis includes a
range of order quantity levels; and displaying, via the output device, a
first indicator in a first location of the money management region
corresponding to a first set of money management parameters for
controlling submission of the plurality of orders to the electronic
exchange.

2. The method of claim 1 where the first indicator is updatable according
to market information received from the electronic exchange for the
tradeable object.

3. The method of claim 1, further comprising displaying a second
indicator in a second location of the money management region
corresponding to a second set of money management parameters for
controlling the plurality of orders.

4. The method of claim 3 where the second location is updatable according
to market information received from the electronic exchange for the
tradeable object.

5. The method of claim 3, further comprising: determining a net profit
level and a realized profit level according to market information;
updating the first indicator to a new first location in response to a
change in the net profit level; and updating the second indicator to a
new second location in response to a change in the realized profit level.

6. The method of claim 1 where the money management region comprises a
plurality of money management regions, each money management region for a
set of corresponding money management parameters.

7. The method of claim 6 where the plurality of money management regions
comprises a first money management region for a set of less restrictive
money management parameters, and a second money management region for a
set of more restrictive money management parameters.

8. The method of claim 1 where the plurality of money management
parameters comprises at least one of a maximum order quantity and a
maximum net position.

9. The method of claim 1, further comprising displaying a potential
profit indicator in the money management region for at least one of a
plurality of potential profit levels for a predetermined market movement.

10. The method of claim 1, further comprising displaying a working order
profit indicator in the money management region.

11. A non-transitory computer readable medium having instructions stored
therein which, when executed by a computing device, cause the computing
device to execute acts comprising: displaying a money management region
for a plurality of money management parameters for controlling submission
of a plurality of orders for a tradeable object to an electronic
exchange, the money management region having a profit axis substantially
orthogonal to a quantity axis, where the profit axis includes a range of
profit levels and the quantity axis includes a range of order quantity
levels; and displaying a first indicator in a first location of the money
management region corresponding to a first set of money management
parameters for controlling submission of the plurality of orders to the
electronic exchange.

12. The non-transitory computer readable medium of claim 11 where the
first indicator is updatable according to market information received
from the electronic exchange for the tradeable object.

13. The non-transitory computer readable medium of claim 11 where the
acts further comprise displaying a second indicator in a second location
of the money management region corresponding to a second set of money
management parameters for controlling the plurality of orders.

14. The non-transitory computer readable medium of claim 13 where the
second location is updatable according to market information received
from the electronic exchange for the tradeable object.

15. The non-transitory computer readable medium of claim 13 where the
acts further comprise: determining a net profit level and a realized
profit level according to market information; updating the first
indicator to a new first location in response to a change in the net
profit level; and updating the second indicator to a new second location
in response to a change in the realized profit level.

16. The non-transitory computer readable medium of claim 11 where the
money management region comprises a plurality of money management
regions, each money management region for a set of corresponding money
management parameters.

17. The non-transitory computer readable medium of claim 16 where the
plurality of money management regions comprises a first money management
region for a set of less restrictive money management parameters, and a
second money management region for a set of more restrictive money
management parameters.

18. The non-transitory computer readable medium of claim 11 where the
plurality of money management parameters comprises at least one of a
maximum order quantity and a maximum net position.

19. The non-transitory computer readable medium of claim 11 where the
acts further comprise displaying a potential profit indicator in the
money management region for at least one of a plurality of potential
profit levels for a predetermined market movement.

20. The non-transitory computer readable medium of claim 11 where the
acts further comprise displaying a working order profit indicator in the
money management region.

Description:

CROSS REFERENCE TO RELATED APPLICATIONS

[0001] This application is a continuation of U.S. patent application Ser.
No. 12/504,594, filed on Jul. 16, 2009, entitled "System and Method for
Money Management in Electronic Trading Environment", now pending, which
is a continuation of U.S. patent application Ser. No. 11/416,464, filed
on May 2, 2006, entitled "System and Method for Money Management in
Electronic Trading Environment", now U.S. Pat. No. 7,580,882, which is a
continuation of U.S. patent Ser. No. 10/447,703, filed on May 29, 2003,
entitled "System and Method for Money Management in Electronic Trading
Environment", now U.S. Pat. No. 7,565,315, which is a
continuation-in-part of U.S. patent application Ser. No. 10/355,471,
filed on Jan. 31, 2003, entitled "System and Method for Money Management
in Electronic Trading Environment", now U.S. Pat. No. 7,752,117, all of
which are entirely incorporated by reference herein for all purposes.

FIELD OF INVENTION

[0002] The present invention is directed towards electronic trading. More
specifically, the present invention is directed to tools for assisting a
trader in risk analysis, and making profitable trades in an electronic
trading environment.

BACKGROUND

[0003] Trading methods have evolved from a manually intensive process to a
technology enabled, electronic platform. With the advent of electronic
trading, a user or trader can be in virtually direct contact with the
market, from practically anywhere in the world, performing near real-time
transactions, and without the need to make personal contact with a
broker.

[0004] Electronic trading is generally based on a host exchange, one or
more computer networks, and client devices. In general, the host exchange
includes one or more centralized computers to form the electronic heart.
Its operations typically include order matching, maintaining order books
and positions, price information, and managing and updating a database
that records such information. The host exchange is also equipped with an
external interface that maintains uninterrupted contact to the client
devices and possibly other trading-related systems.

[0005] Using client devices, market participants or traders link to the
host exchange through one or more networks. A network is a group of two
or more computers or devices linked together. There are many types of
wired and wireless networks such as local area networks and wide area
networks. Networks can also be characterized by topology, protocol, and
architecture. For example, some market participants may link to the host
through a direct connection such as a T1 or ISDN. Some participants may
link to the host exchange through direct connections and through other
common network components such as high-speed servers, routers, and
gateways. The Internet, a well-known collection of networks and gateways,
can be used to establish a connection between the client device and the
host exchange. There are many different types of networks and
combinations of network types known in the art that can link traders to
the host exchange.

[0006] Regardless of the way in which a connection is established,
software running on the client devices allows market participants to log
onto one or more exchanges and participate in at least one market. A
client device is a computer such as a personal computer, laptop computer,
hand-held computer, and so forth that has network access. In general,
client devices run software that creates specialized interactive trading
screens. Trading screens enable market participants to obtain market
quotes, monitor positions, and submit orders to the host.

[0007] Generally, when an order is submitted to a host exchange, the host
checks the conditions associated with the order, for example price and
quantity, and prioritizes the order with other orders of the same price.
When the order conditions are satisfied in the market, a trade occurs and
trade information is then relayed in some fashion to one or more client
devices. In fact, the host exchanges typically publish a data feed to the
client devices so that the traders can have access to the most current
market information.

[0008] Market information commonly includes information regarding the
inside market and market depth. The inside market is the lowest sell
price in the market and the highest buy price in the market at a
particular point in time. Market depth refers to quantities available at
the inside market and may also refer to quantities available at other
prices away from the inside market. The quantity available at a given
price level is usually provided by the host exchange in aggregate sums.
In other words, a host exchange usually provides the total buy or the
total sell quantity available in the market at a particular price level
in its data feed. The extent of the market depth available to a trader
usually depends on the host exchange. For instance, some host exchanges
provide market depth for all price levels, while some provide only
quantities associated with the inside market, and others may provide no
market depth at all. Additionally, host exchanges can offer other types
of market information such as the last traded price (LTP), the last
traded quantity (LTQ), and order fill information.

[0009] To profit in electronic markets, market participants must be able
to assimilate large amounts of data, including market information
provided by an exchange, and, accordingly, react quicker than other
competing market participants to take advantage of profitable market
conditions. Further, because electronic trading offers tools that enable
traders to react to the market so much faster than in the traditional pit
environment, a trader risks and may lose a lot of money so much quicker.
It is therefore desirable to offer tools that can assist a market
participant in adapting his or her trading strategy to an electronic
marketplace, help the participant to make desirable trades, as well as
provide means for money management and risk analysis.

BRIEF DESCRIPTION OF THE DRAWINGS

[0010] Example embodiments of the present invention are described herein
with reference to the following drawings, in which:

[0011]FIG. 1 is an example network configuration for a communication
system utilized to access one or more exchanges;

[0012]FIG. 2 is a block diagram illustrating an example money management
module according to one embodiment;

[0013]FIG. 3 is a flow chart illustrating an example method for money
management in an electronic trading environment according to one
embodiment;

[0020]FIG. 10 is a block diagram illustrating an example monitoring
interface that allows a trader to view market conditions and limitations
imposed on each tradeable object or a group of the tradeable objects
associated with the created filters;

[0022]FIG. 12 is a block diagram illustrating an example graphical
interface using which a trader can configure a plurality of filters for
each P/L trigger level;

[0023]FIG. 13 is a block diagram illustrating an example graphical
interface for displaying a money management filter band in combination
with P/L indicators and time-based filter indicators.

[0024]FIG. 14 is a block diagram illustrating an example graphical
interface that may be used for verifying and changing filter conditions
configured by a trader or a system administrator based on a plurality of
drop off loss conditions; and

[0025]FIG. 15 is a block diagram illustrating an example interface that
displays potential profit drop off indicators in relation to a trader's
realized profit indicator.

DETAILED DESCRIPTION

I. Profit Level Indicators Overview

[0026] As described with reference to the accompanying Figures, the
present invention provides a graphical user interface that displays and
dynamically updates a plurality of profit/loss ("P/L") level indicators
including a realized P/L indicator, and one or more P/L indicators that
are determined based on the trader's net position and current market
conditions, such as the last traded price, the embodiments of which will
be described in greater detail below. Because the profit indicators
reflect the current market conditions and trader's net position, the
trader may view potential profit levels at any time during a trading day
and close his position when the market moves in a direction favorable to
the trader. Also, using the profit indicators determined based on the
trader's net position, the trader can easily control his open positions
and take advantage of market movements that he or she would have
otherwise missed.

[0027] In one embodiment, the plurality of P/L indicators may be displayed
in relation to a plurality of money management regions defining money
management parameters designed to control trader's trading so that, based
on the positions of the P/L indicators, a trader may quickly determine
his current as well as potential money management parameters. In addition
to P/L indicators, a trader may also view a number of potential risk
indicators that may aid a trader in viewing his potential losses or gains
before the trader enters any order having a predetermined order quantity.
The potential risk or gain indicators may also be displayed in relation
to the money management regions so that a trader can quickly determine
his potential P/L level as well as a set of money management parameters
which will control the trader's trading when a trader enters an order
having a predetermined order quantity and when the market moves a
predetermined number of ticks up or down, as defined by one or more
risk/gain indicators.

II. Hardware and Software Overview

[0028]FIG. 1 is a block diagram that illustrates an electronic trading
system 100 in accordance with the preferred embodiments. The system 100
includes one or more exchanges 102, 104, 106 and one or more client
devices 108, 110, 112. Intermediate devices such as gateways 114, 116,
118, routers, and other such types of client devices may be used to
connect network 120 to networks 122, 124, 126 so that client devices 108,
110 and 112 and exchanges 102, 104, and 106 can communicate market
information. It should be understood that the present invention is not
limited to any particular system configuration. For example, networks
122, 124, and 126, or client devices 108, 110, 112 could connect
separately to gateways 114, 116, 118. Of course, there are many other
system configurations on which the preferred embodiments may be
implemented.

A. Host Exchange

[0029] Host exchanges 102, 104, and 106 may represent electronic exchanges
such as, for example, the London International Financial Futures and
Options Exchange ("LIFFE"), the Chicago Board of Trade ("CBOT"), the New
York Stock Exchange ("NYSE"), the Chicago Mercantile Exchange ("CME"),
the German stock exchange-Exchange Electronic Trading ("Xetra"), or the
European Exchange ("Eurex"), or any other exchange, which may include
basic to more complex systems that automatically and electronically match
incoming orders. These example exchanges and other exchanges are well
known in the art. Communication protocols required for connectivity to
one of these exchanges are also well known in the art.

[0030] Exchanges 102, 104, 106 allow traders to log onto a market to trade
tradeable objects. As used herein, the term "tradeable objects," refers
simply to anything that can be traded with a quantity and/or price. It
includes, but is not limited to, all types of tradeable objects such as
financial products, which can include, for example, stocks, options,
bonds, futures, currency, and warrants, as well as funds, derivatives and
metals. The tradeable object may be "real," such as products that are
listed by an exchange for trading, or "synthetic," such as a combination
of real products that is created by the user. A tradeable object could
actually be a combination of other tradeable objects, such as a class of
tradeable objects.

[0031] An exchange 102, 104, 106 can implement numerous types of order
execution algorithms, and sometimes the type of algorithm depends on the
tradeable object being traded. The preferred embodiments may be adapted
by one skilled in the art of work with any particular order execution
algorithm. Some example order execution algorithms include
first-in-first-out and pro rata algorithms. The first-in-first-out (FIFO)
algorithm, used for some markets listed with Eurex for example, gives
priority to the first person to place an order. The pro rata algorithm,
used for some markets listed with LIFFE for example, splits all orders
for the same price. The present invention is not limited to any
particular type of order execution algorithm.

[0032] Regardless of the type of order execution algorithm used, each
exchange 102, 104, and 106 preferably provides similar types of
information to subscribing devices 108, 110, and 112. Market information
may include data that represents the inside market, which is the lowest
sell price (best ask) and the highest buy price (best bid) at a
particular point in time. Market information may also include market
depth. Market depth refers to quantities available at the inside market
and can also refer to quantities available at other prices away from the
inside market. The quantity available at a given price level is usually
provided by the host exchange in aggregate sums. In other words, the
exchange usually provides the total buy quantity and the total sell
quantity available in the market at a particular price level in its data
feed. The extent of the market depth available to a trader usually
depends on the exchange. For instance, some exchanges provide market
depth for all (or most) price levels, while some provide only quantities
associated with the inside market, and others may provide no market depth
at all. Additionally, the exchanges 102, 104, 106 can offer other types
of market information such as the last traded price (LTP), the last
traded quantity (LTQ), and order fill information.

B. Gateway

[0033] Gateways 114, 116, 118 are devices such as a mainframe,
superminicomputer, minicomputer workstation, microcomputer that connect
network 120 to networks 122, 124, 126 so that market information can be
successfully passed between client devices 108, 110, 112 and exchanges
102, 104, 106. Gateways 114, 116, 118 preferably receive market
information from the exchanges 102, 104, and 106 and convert it to a
format compatible with the protocols used by the client devices 108, 110,
112 using conversion techniques known in the art. Also, as known by those
skilled in the art, gateways 114, 116, 118 may have one or more servers
to support data feeds, such as a price server for processing price
information, an order server for processing order information, and a fill
server for processing fill information. A trader at one of the client
devices 108, 110, 112 can subscribe to price information, order
information, and fill information for a particular market hosted at the
exchanges 102, 104, and 106. The gateways 114, 116, and 118 also
preferably receive transaction information, such as orders, order
changes, queries, etc., from the client devices 108, 110, and 112 and
forward that information to corresponding exchanges 102, 104, and 106.

B. Client Device

[0034] The client devices 108, 110, and 112 are devices that provide an
interface for traders to trade at one or more markets listed with one,
some, or all of the exchanges 102, 104, and 106. Some examples of client
devices include a personal computer, laptop computer, handheld computer,
and so forth. The client devices 108, 110, and 112, according to one
preferred embodiment, include at least a processor and memory. The
processor and memory, both well known computer components, are not shown
in FIG. 1 for sake of clarity. Preferably, the processor has enough
processing power to handle and process various types of market
information. It should be understood that more market information is
received and processed, the more processing power is preferred. However,
any present day processor has enough capability to perform at least the
most basic part of the present invention.

[0035] Memory may include a computer readable medium. The term computer
readable medium, as used herein, refers to any medium that participates
in providing instructions to processor for execution. Such a medium may
take many forms, including but not limited to, non-volatile media, and
transmission media. Non-volatile media includes, for example, optical or
magnetic disks, such as a storage device. Volatile media include dynamic
memory, such as main memory or random access memory ("RAM"). Common forms
of computer-readable media include, for example, a floppy disk, a
flexible disk, a hard disk, a magnetic tape, or any other magnetic
medium, a CD-ROM, any optical medium, punch cards, paper tape, any other
physical medium with patterns of holes, a RAM, a PROM, and EPROM, a
FLASH-EPROM, and any other memory chip or cartridge, or any other medium
from which a computer can read.

[0036] The client devices 108, 110, and 112 receive market information
from any of the exchanges 102, 104, and 106. According to the preferred
embodiments, market information is displayed to the trader(s) on the
visual output device or display device of the client devices 108, 110,
and 112. The output device can be any type of display. For example, the
display could be a CRT-based video display, an LCD-based or a gas
plasma-based flat-panel display, a display that shows three-dimensional
images, or some other display type. The present invention is not limited
to any particular type of display.

[0037] Upon viewing the market information or a portion thereof, a trader
may wish to send orders to an exchange, cancel orders in a market, query
an exchange, and so on. To do so, the trader may input various commands
or signals into the client devices 108, 110, and 112, for example, by
typing into a keyboard, inputting commands through a mouse, or inputting
commands or signals through some other input devices. Upon receiving one
or more commands or signals, the client devices 108, 110, and 112
preferably generate transaction information. For instance, a trader may
click a mouse button to initiate an order to buy a tradeable object.
Then, transaction information would include an order to buy a particular
quantity of the tradeable object at a particular price. There are many
different types of messages and/or order types that can be submitted, all
of which may be considered various types of transaction information. Once
generated, transaction information is sent from the client devices 108,
110, and 112 to the host exchange 102, for example, over the networks
120, 122, 124, and 126.

III. Money Management and Profit-Related Information

[0038]FIG. 2 shows an example overview of the money management
application 200, referred hereinafter interchangeably as a money
management module. The money management module 200 may be implemented on
any type of computing device. In the preferred embodiment, the money
management module 200 is implemented on a client device. Alternatively,
the money management module 200 may be implemented on any type of
computing device such as a gateway, for example.

[0039] The money management module 200 preferably includes one or more
filters 202. Each filter is made up of certain filter criteria that is
preferably set by an individual, such as by a trader himself or by an
administrator. For example, the filter criteria may include criteria that
are based on the order itself, such as the name of an exchange, a
tradeable object, a type of order, e.g., whether the order is a buy or a
sell, a range of price levels, or a range of quantities. Additionally,
the filter criteria may include criteria that are based on factors other
than those related to the order, such as, for example, trader's profit
and loss ("P/L") information, last traded price, last traded quantity,
theoretical values, or other variables. In such an embodiment, the money
management application 200 may determine filter criteria dynamically
based on trader-related data or order data, e.g., order data being sent
from a client device to an exchange, or based on order-related data that
is received from the exchange in a data feed, data from any outside
sources such as employment numbers or interest rates, or any data coming
from an exchange such as price information, for example. Dynamic filter
criteria may include a trader's net position, profit levels, a total
working buy/sell quantity, a total filled buy/sell quantity, or any data
that is received from the exchange or outside sources such as any news.
Further, the filter criteria may be time-based so that time-based filters
may be used in combination with another set of filter conditions. In such
an embodiment, if more than one filter applies to the order, the most
conservative filter conditions will control order parameters.
Alternatively, the time-based filter may suppress other filters for the
time period associated with the filter.

[0040] As will be described in greater detail below, filter criteria may
be based on different types of P/L levels including an open, net, or
realized P/L level. Further, for example, filter criteria may be based on
any user-configurable equations that may include a plurality of
user-configurable factors that are based on data available from an
exchange or other sources. It should be understood that many other filter
criteria are possible as well, and filter criteria may be user
configurable.

[0041] According to an example embodiment, each filter is associated with
one or more filter conditions that may be applied to an incoming order if
the order matches the filter criteria. This process, as will be described
in greater detail below, may result in sending a modified order to an
exchange. For example, a certain condition associated with a filter, when
applied to the order, may result in modifying one or more order
parameters, such as increasing or decreasing order quantity.
Alternatively, an application of a certain filter condition may result in
preventing the order from reaching the exchange. Further, alternatively,
a filter condition may result in sending the order to the exchange
without modifying any of the order parameters.

[0042] It should be understood that the money management module 200 may
enable a trader or a risk administrator to configure filters as well as
any filter conditions for each filter via a graphical user interface, the
embodiments of which will be discussed in greater detail below. In such
an embodiment, the graphical user interface may provide a trader with a
list of filters so that when a trader selects one of the filters from the
list, a second graphical user interface may be displayed, via which the
trader may define any desired filter conditions for that filter.
Alternatively, a single interface may be used to enable a trader to
select any desired filters and define filter conditions. Further,
alternatively, a trader may define filters and/or filter conditions using
a spreadsheet application that may be linked to the graphical user
interface or money management module 200. In such an embodiment, for
example, a filter condition may be in a format of an equation, and a
trader may enter the equation or change any variables in the equation
using the spreadsheet.

[0043] When a trader uses a spreadsheet, it should be understood that any
desirable data exchange protocol could be used to embed information from
the third party software to the money management module 200 or to the
graphical user interface that is used to define filters and filter
conditions. For example, when the Microsoft Windows is used as the third
party software, Microsoft OLE 2.0 may be used to perform these functions.
In such an embodiment, Microsoft OLE 2.0 may be used to provide a link
between any filter condition and a cell from a Microsoft EXCEL
spreadsheet. Data exchange protocols in general, and linking as well as
embedding techniques in particular, are well known to those skilled in
the art. It should be understood that when an equation is used to define
a filter condition, every time a value of one of the equation variables
changes, the spreadsheet application or any other third party software
may dynamically calculate a new value for the filter condition associated
with the equation. Thus, when an order matches a certain filter
associated with such an equation, the money management module 200 may
apply the most recently calculated filter conditions provided by the
spreadsheet application, for example.

[0044] It should be understood that an individual trader can uniquely set
filters and filter conditions to suit his or her individual trading risk
strategies. In one embodiment, the trader could program the money
management filters and conditions in a variety of ways and at any time
such as before trading begins or on the fly. Alternatively, a system
administrator who oversees a number of traders may set up a number of
filters and filter conditions for a group of traders or for individual
traders, thus creating a money management program that controls trades of
the group of traders. Then, when a trader in that group inputs a new
order, the money management module 200 can execute the program by
applying the pre-configured filter criteria and filter conditions to the
order.

[0045]FIG. 3 is a flow chart illustrating an example method 300 for money
management in an electronic trading environment. According to an example
embodiment, the money management module 200 may perform the method 300.
The example method 300 includes receiving an order at step 302, applying
a first filter at step 304, determining if the filter is applicable to
the order at step 306, then, if the filter is applicable, applying
conditions associated with the filter at step 308, and determining if
there are any other filters to be applied to the order at step 310. If
there are any other applicable filters, the method 300 includes
retrieving the next filter at step 314, and then repeating steps 304,
306, 308, and 310 until there are no more filters that are applicable to
the order. If there are no more filters, the method 300 includes, at step
312, processing the order based on the applied conditions.

[0046] At step 302, money management module 200 detects a new order being
placed by a trader. It should be understood that a trader may input a new
order using many different trading applications and interfaces. In one
embodiment, a trader may use a commercially available trading
application, X_TRADER® from Trading Technologies International, Inc.
of Chicago, Ill., that allows the trader to trade in a system like the
one shown in FIG. 1. X_TRADER@ also provides an electronic trading
interface, referred to as MD Trader®, in which working orders and/or
bid and ask quantities are displayed in association with a static axis of
prices. Portions of the X_TRADER® and the MD Trader®-style display
are described in U.S. patent application Ser. No. 09/590,692, entitled
"Click Based Trading With Intuitive Grid Display of Market Depth," filed
on Jun. 9, 2000, U.S. patent application Ser. No. 09/971,087, entitled
"Click Based Trading With Intuitive Grid Display of Market Depth and
Price Consolidation," filed on Oct. 5, 2001, and U.S. application Ser.
No. 10/125,894, entitled "Trading Tools for Electronic Trading," filed on
Apr. 19, 2002, the contents of which are incorporated herein by
reference. Further, it should be understood that orders may be placed
using any automatic trading application as well.

[0047] However, the preferred embodiments are not limited to any
particular product that allows a trader to input orders and trade in the
system like the one shown in FIG. 1. Further, it should be understood
that the money management module 200 and a trading application may share
commonly used information so that, for example, the money management
module 200 may have access to any data provided via data feeds from an
exchange, such as information related to any fills related to orders
submitted by a particular trader, and also to any data entered by a
trader via a trading application interface.

[0048] When the new order is detected, at step 304, the money management
module 200 may access a set of pre-configured filters and then may apply
a first filter to the order. It should be understood that a filter may
include one or more filter criteria, such as, for example, a trader's
identifier, a name of a predetermined tradable object, a type of the
order, e.g., a buy or a sell, or any other trader-related filter criteria
such as criteria related to trader's performance, for example. Then, at
step 306, the money management module 200 determines if one or more
criteria associated with the first filter apply to the received order. It
should be understood that a filter may include one or more user
configurable criteria. If a filter includes a plurality of filter
criteria, the order preferably matches all identified filter criteria for
the filter to be applicable.

[0049] If the filter applies to the order, at step 308, the money
management module 200 applies one or more conditions associated with the
filter to the order parameters. For example, the application of a filter
condition to an order may result in decrementing or incrementing the
quantity associated with the order when the order is submitted to the
exchange. If the money management module 200 determines that the first
filter does not apply to the order, the method 300 continues at step 310,
and the money management module 200 determines if there are more filters
to be applied to the order. If there are any other filters, at step 314,
the money management module 200 selects a next filter from the list of
filters, and the method 300 continues at steps 304, 306, 308, and 310.

[0050] It should be understood that if two or more filters are associated
with the same condition imposing different restrictions, such as, for
example, decreasing order quantities to two different values, the most
conservative (the lowest) order quantity associated with the filter
criteria could be used to modify the quantity in the original order.
Alternatively, a trader or system administrator may configure filter
conflict rules that may be used by the money management module 200 to
determine which filter condition, if any, should be applied to the order.

[0051] Referring back to step 310, if there are no more filters applicable
to the order, at step 312, the money management module 200 applies
conditions imposed by the filter(s) to parameters associated with the
order. Once the money management module 200 applies the filters to the
incoming order, the order may be sent to the exchange. As illustrated in
FIG. 3, at block 312, sending the order to the exchange may involve
sending the original order with no conditions, e.g., the original order
with its non-modified order parameters, or sending the original order
with conditions, e.g., the original order having one or more of its order
parameters modified based on the conditions of the applicable filter(s).
Further, alternatively, the application of filter conditions may result
in not sending the order to the exchange, e.g., effectively preventing
the order from reaching the exchange. If the order is rejected because
one of the money management filter conditions prevents the order from
being sent to the exchange, a message may be displayed for a trader so
that a trader is aware that the order was not sent to the exchange.
Alternatively, a message may also be displayed to inform a trader of any
order modifications such as order quantity modifications, for example.

[0052] In addition to its money management functionality, the money
management module 200 may also determine and display to a trader via one
or more graphical interfaces, in combination with or separately from the
money management filters, one or more P/L level indicators that may allow
a trader to view his/her profit information at any time during a trading
day and that may assist a trader in making profitable trades. The next
few figures, FIGS. 4, 5, 6, 7 and 8 illustrate example graphical
interfaces that display profit related indicators associated with a
plurality of profit levels. Then, FIGS. 9, 10 and 12 illustrate example
graphical interfaces that enable a trader to configure and view filters
and filter conditions that may be used for automatic money management.
FIGS. 11 and 13 displays an example graphical interface that may be used
to display money management filters and profit indicators. Then, FIGS. 14
and 15 are example graphical interfaces that display potential loss
drop-off indicators that may be used to verify filter configurations and
to assist a trader in making new trades and his/her trading strategy.
However, it should be understood that the graphical representations of
profit related information as well as filters and filter conditions given
below are only examples, and those skilled in the art will recognize that
modification or changes within the scope of the present invention may be
made without departing from the spirit thereof. Also, it should be
understood that the present invention is not limited to the number of
filters or filter conditions presented in each figure, nor is it limited
to the example layouts, and the money management interface as well as
profit indicators may be configured in a variety of different ways based
on user preferences.

[0053] As will be illustrated in reference to the subsequent figures, a
graphical interface may display to a trader a plurality of P/L indicators
that may assist a trader in making profitable trades as well as allow a
trader to view his current as well as potential P/L levels at any time
during a trading day. More specifically, the P/L indicators include
indicators corresponding to realized, net, and open P/L levels, the
methods of calculating each of them will be described hereinafter.

[0054] The realized P/L level is based on a difference between the total
sell price and the total buy price associated with trader's trades
related to a tradeable object. Therefore, the realized P/L level may be
calculated using the following formula:

Realized P/L=Sells-Buys EQN (1)

[0055] In one embodiment, the Realized P/L is calculated when the trader's
net position is zero such as, for example, when a trader buys 30 lots
first and then sells 30 lots. Alternatively, the Realized P/L could be
determined when a trader's net position crosses zero. In such an
embodiment, for example, when a trader initially buys 30 lots at 100, and
then sells 50 lots at 101, the Realized P/L may be determined based on 30
buys at 100 and 30 sells at 101, leaving the net position of 20. Further,
alternatively, the Realized P/L may be determined by mapping each new
fill to one of the quantities associated with the net position. For
example, if the net position is 30, and a new fill of 2 associated with a
sell order is detected, the quantity of 2 may be matched with one of the
buy order quantities that got filled to establish the net position of 30,
thus creating a new net position of 28. It should be understood that
matching of the orders may be done in any manner. For example, if a
trader entered a plurality of buy orders to establish the position of 30,
the sell order quantity may be matched with a buy order quantity and
price associated with the first buy order. Alternatively, the sell
quantity may be matched with a buy order quantity and price associated
with the last buy order that was entered to create the net position of
30. Further, alternatively, an average buy price may be calculated for
all buy orders, and the average price of all orders may be used as a
basis for determining the Realized P/L. It should be understood that a
user could also define how and when the Realized P/L is calculated.
According to an example embodiment, the Realized P/L level may be
dynamically updated based on market updates being received from one or
more exchanges so that the Realized P/L level may be updated every time
one of the conditions described above is detected.

[0056] Next, the net profit level may be determined when the trader's net
position is non-zero, such as when the trader holds a position on the
market. Therefore, the net profit level is determined based on the
trader's net position and the current market conditions, such as the last
traded price being received from the exchange. Preferably, the net
position is calculated based on the buy and sell orders that have been
filled excluding working orders, which may be used for risk analysis, as
will be described below. It should be understood that when the trader's
net position or the last traded price changes, the net P/L level is
dynamically recalculated to reflect each change.

[0057] The net profit level may be calculated using the following formula:

Net P/L=(Sells-Buys)+(Net Position×Market Price) EQN (2)

Referring to EQN (2), the first factor "(Sells-Buys)" corresponds to the
cost of every buy and sell that a trader has made, and the second factor
"(Net Position×Market Price)" is an adjustment factor as if the
trader was to trade out of his open positions in the current market, such
as based on the last traded price corresponding to a predetermined
tradeable object. Therefore, using the net P/L, the trader can easily
determine the profit or loss that the trader would incur if he/she were
to close the pending positions at the last traded price. Therefore,
referring to the example given above of the 30 buys at 100, and then 50
sells at 101, and using EQN (2), the Net P/L would be 30, i.e.,
(5050-3000)+(-20×101)=2050-2020, which is 30. It should be
understood, however, that other prices other than the last traded price
could also be used to reflect the current market conditions. For example,
a bid/ask price at the inside market could be used in place of the last
traded price so that when a trader's net position is negative, the bid
price at the inside market is used, and when a trader's position is
positive, the ask price at the inside market is used instead. It should
be understood that different or equivalent prices could also be used.

[0058] The Net P/L may be used as a factor in any other equations to
calculate different types of P/Ls. For example, the Open P/L could be
calculated by subtracting the Realized P/L from the Net P/L. The Open P/L
level may be calculated using the following formula:

Open P/L=Net P/L-Realized P/L EQN (3)

Using the Open P/L, the trader can easily view the risk that the trader
is taking by keeping his positions opened at the current market level.
Referring to the example above, at the time when the trader initially
gets into the position of -20 by selling 50 contracts at 101 while having
the open position of 30 that he/she entered at 100, the Open P/L is zero
as there has been no market movement since the trader entered into the
position of -20, i.e., sold 50 lots at 101. However, once the market
moves and reaches the last traded price of 100, for example, the market
move is favorable to the trader since the trader has the open position of
-20 that he entered by selling at 101. Therefore, the Net P/L is 50
[(5050-3000)+(-20×100)], and the Open P/L is 20 (50-30), indicating
that the trader is making money in the current market, and would realize
the P/L of 50 if he were to close at the current market level of 100,
causing the Net P/L value to be added to the Realized P/L. It should be
understood that the formulas in EQNs (1) and (2) are only examples, and
different formulas could also be used. For example, any market fees and
transaction costs can be subtracted from the Realized P/L in EQN (1).

[0059]FIG. 4 is a block diagram illustrating an example graphical
interface 400 for displaying P/L information related to a tradeable
object being traded by a trader at one or more electronic exchanges.

[0060] As illustrated in FIG. 4, the interface 400 displays a number of
graphical and numerical indicators corresponding to the Realized P/L and
Net P/L levels. More specifically, graphical indicators 424 and 426
correspond to the Realized and Net P/Ls, respectively, and the numerical
indicators 404, 410 display actual values (120, 200) corresponding to the
two P/L levels. It should be understood that the distance between the net
and realized indicators corresponds to the Open P/L. Thus, in the
embodiment illustrated in FIG. 4, where the P/L scale (x-axis) increases
to the left, the Open P/L is positive and indicates that the trader is
making money in the current market. It should be understood that the
x-axis could also display values increasing from left to right as well.
More specifically, as illustrated in the indicator 416, the Open P/L is
80. Additionally, the height of the Net P/L indicator may correspond to
the trader's Net Position. In the embodiment illustrated in FIG. 4, the
quantity scale, that in this and following examples is used to display
the Net Position, is displayed on the y-axis of the graphical indicator
window, and the height of the indicator 426 corresponds to the net
position of 25. However, instead of displaying the net position in
relation to the quantity axis, a numerical value corresponding to the net
position could be displayed in relation to the indicator 426.

[0061] It should be understood that the indicator 426 is preferably
color-coded to distinguish a long (positive) position from a short
(negative) net position. For example, red and blue could be used where
the red indicator would correspond to the short position, and the blue
indicator corresponds to the long position. However, different colors
could also be applied to the indicator. Additionally, it should be
understood that the graphical display could be configured in any manner
so that the values on the x-axis, for example, in this Figure as well as
subsequent Figures could increase in a traditional manner to the right
rather than to the left. Further, the axis could be displayed in any
manner as well, such as at angles that can be user configurable.

[0062] Additionally, as will be explained in greater detail below, each
graphical profit indicator may be mapped to and displayed in one of a
plurality of money management regions that correspond to a plurality of
money management filters. As mentioned in earlier paragraphs, a money
management filter is defined using one or more filter criteria and is
associated with a set of parameters that control trader's trading.
According to one example embodiment, a filter criterion corresponds to a
predetermined profit range, and the controlling parameters may define a
maximum order quantity that a trader may submit with any order, and a
maximum net position that the trader may hold based on the trader's
profit level. Further, it should be understood that a trader or a system
administrator may configure which of the P/L levels controls selection of
the filters. Thus, for example, if a trader places an order that has an
order quantity higher than a maximum order quantity defined by the filter
associated with the trader's Net or Open P/L level, then, before the
order is sent to the exchange, the order quantity is modified to the
value associated with the maximum order quantity defined by the filter.
It should be understood that the Net P/L level, Open P/L level, the
Realized P/L level, or a combination thereof may determine the filter
selection for the money management purposes, and the maximum order
quantity as well as the maximum net position may be determined using an
equation defined for each filter so that more than one order quantity can
be associated with each filter.

[0063] Using the Open or Net P/L level as a filter criterion, the money
management module may guard and limit trader's losses if the market moves
in a direction that is not favorable to a trader. Then, the change in the
trader's Open and Net P/Ls, which dynamically change based on the market
movement, may consequently move the trader to the lower/higher filter
associated with a higher/lower maximum order quantity and maximum net
position. Therefore, when the market moves against the trader's position,
the trader will be allowed to trade lower order quantities as compared to
order quantities that a trader may trade if the market moves in a
direction favorable to a trader. Additionally, when the market moves
against the trader's position, the money management module may prevent
the trader from further increasing his net position by preventing another
order that would increase the trader's net position from being sent to
the exchange.

[0064] It should be understood that when a system administrator sets up a
number of money management filters for one or more traders, each trader
may also create his own set of filters. The trader-created filters may be
based on the same or different filter criteria and associated filter
conditions as the filters created by the administrator. In such an
embodiment, the money management module may apply two sets of filters to
an incoming order, and if two or more applicable filters conflict, the
most conservative filter condition may be selected to control the orders
being sent to the exchange. This embodiment may be especially useful when
a trader is willing to risk less than what he is allowed to based on the
filters that have been set up by the system administrator.

[0065] As mentioned in earlier paragraphs, the filter conditions may
include a maximum order quantity and a maximum net position. Referring
back to FIG. 4, according to one example embodiment, in addition to
displaying P/L graphical indicators, the graphical interface 400 may also
display filter conditions determined for each P/L level. As shown in FIG.
4, the trader's Realized P/L 404 corresponds to a money management filter
associated with a maximum order quantity 406 of 24 and a maximum net
position 408 of 40. Further, as shown in FIG. 4, the Net P/L 410
corresponds to a different money management filter associated with a
maximum order quantity 412 of 44 and a maximum net position 414 of 88.
Then, the Open P/L 416 is associated with the filter conditions including
a maximum order quantity 418 of 30, and a maximum net position 420 of 50.

[0066] The graphical interface 400 may also display numerical profit
levels including the trader's maximum, minimum, and current realized
profit levels of 414, -249, and 120, as shown at 422. It should be
understood that the P/L levels do not necessarily have to reflect the P/L
levels determined for the entire trading day interval. Alternatively, a
trader may select a shorter time interval, such as the last hour, for
which the maximum, minimum, and current realized P/L levels may be
determined, and the values of which may be dynamically displayed via the
graphical interface. Additionally, it should be understood that the
graphical interface 400 may also display numerical values for maximum,
minimum, and current profit levels related to other P/L levels, such as
the Net P/L and/or Open P/L levels.

[0067] According to an example embodiment, positions of profit indicators
on the graphical interface may be dynamically updated every time a new
P/L level is recalculated based on market condition changes, such as last
traded price changes, or based on changes in the trader's net position.
Preferably, the re-calculation is done dynamically based on information
being provided from the exchange, and every time a new net position or
last traded price is detected, the P/L levels are recalculated. Once the
P/Ls are recalculated, the respective P/L indicators, the Net and Open
P/L indicators in this example, may be repositioned to the new level to
reflect the change. Similar updates may occur when a changed in the
trader's net position is detected.

[0068] It should be understood that the example embodiments for displaying
trader's profit related information are not limited to the display
illustrated in FIG. 4. For example, if a trader simultaneously trades a
plurality of tradeable objects, the graphical interface could be divided
into a plurality of windows or areas, and each window may display
graphical and/or numerical profit level indicators associated with one of
the plurality of tradeable objects being traded by the trader.

[0069] Further, in addition to calculating P/L levels for each tradeable
object, the P/L levels could be determined for all or a selected group of
tradeable objects being traded by the trader at one or more exchanges. In
such an embodiment, the trader may view, in addition to or instead of P/L
levels determined for a specific tradeable object, his/her overall and
dynamically updated P/L levels. However, if the tradeable objects are
being traded at different denominations, the money management module or
the trading application may convert the P/L levels corresponding to each
tradeable object to the common tick or currency value that is then used
to calculate a cumulative P/L level. Further, alternatively, once a
trader or a system administrator selects which of the P/L levels controls
the money management filter selection, the graphical interface may
display only filter conditions, e.g., the maximum order quantity and the
maximum net position, corresponding to that filter.

[0070] Alternatively, instead of displaying indicators associated with P/L
levels determined throughout the trading day, a trader could instead
reset P/L levels to a zero level at any time during a trading day. In
such an embodiment, the displayed P/L level is based on a P/L calculated
from the zero level starting from the time when a resetting input was
detected. The resetting input may be received via many means including,
for example, any graphical selection input, or any key-combination input.
In one example embodiment, once the reset input is detected, only the
reset P/Ls are displayed, and a trader may switch back to the cumulative
P/L by selecting the same resetting selection input. Alternatively, when
the trader selects the reset input, the cumulative and reset P/L values
may be displayed using different indicators. Further, as will be
described below, since the P/L values control the filter selection, once
the P/L is reset, the most conservative filter may control the trader's
trading since the trader starts trading from the zero P/L level.
Alternatively, the cumulative P/L may still control filter selection,
while the graphical interface displays the reset P/L levels. Further, a
trader may select which of the P/L levels is reset. For example, a trader
may reset only the Realized P/L or only a Net P/L.

[0071] It should be understood that the graphical indicators that are used
to display P/L levels are not limited to any specific format, and the
indicators could have any format and could be user-configurable. For
example, the open, realized, and net P/L indicators may be distinguished
using different colors or different indicator types. The indicators could
also be displayed in any manner, such as horizontally, vertically, or at
any angle, and in association with any trader-related or market-related
information.

[0072] In addition to displaying profit level indicators, the graphical
user interface 400 could also be used for sending orders to one or more
electronic exchange. For example, the net P/L indicator 426 may be
associated with an order-sending component for receiving a command to
send an order to an electronic exchange as a result of a selection of an
area in relation to the indicator 426 and detecting a predetermined key
combination input. Alternatively, a graphical selection order input
indicator could be displayed in relation to the indicators via the
graphical user interface 400 so that once the graphical selection order
input indicator is enabled, a trader may simply select an area in
relation to the indicator 426 to send the order to the exchange. In a
preferred embodiment, an order may be sent to the exchange upon selecting
the indicator 426, and an order quantity may be based on a trader's net
position and may be set to a quantity lower than, higher than, or equal
to the trader's net position. Then, the price of the order may be
determined based on a current net P/L, so that the price of the order may
be based on a current market level. Alternatively, another P/L level in
association with the indicator 426 may be selected, and the price of the
order may be determined based on the selected P/L level and based on the
price level associated with orders associated with the net position
level.

[0073] In addition to displaying current Open and Net P/L levels, the
graphical interface may also display one or more profit levels that are
based on potential future market movements. For example, the graphical
interface may display profit levels that are based on potential market
movements when the market goes against the trader's position, thus,
providing to a trader a graphical representation of potential risk.

[0074]FIG. 5 is a block diagram illustrating a graphical interface 500
for displaying a plurality of profit level indicators including the
indicators associated with working orders that a trader may place on the
market to completely trade-out of his net position.

[0075] The graphical interface 500 displays profit related indicators
determined for the tradeable object XS 502, and includes a realized
profit indicator 504 at the P/L of 110, a net profit indicator 506 at the
P/L of 220, and two additional profit indicators 508 and 510 determined
based on two working orders that a trader has placed in the market to
offset his current net position of -50. For example, the indicator 508
may be associated with a working buy order having a predetermined order
quantity equal to the current net position, placed at the price level of
(LTP-X), where X corresponds to a number of ticks away from the current
LTP. Thus, the profit level associated with the indicator 508 illustrates
a Realized P/L if the working order gets filled. Then, the indicator 510
may correspond to a stop/limit order that a trader has placed on the
market at a price level higher than the last traded price (LTP+X) to
minimize his losses in case his working order associated with the
indicator 508 does not get filled and the market moves against his
position.

[0076] It should be understood that the method of calculating the profit
level corresponding to the stop working order may vary based on system
configurations that are used for placing the stop orders. For example,
"X" may correspond to the price that triggers placement of the order on
the market, and then the price where the actual order is placed on the
market may vary based on the order configuration. For example, once a
trigger price (stop price) is detected, the order may turn into another
order, the type of which may depend on the trader's configuration. For
example, the actual order may be a limit order configured at a limit
price that may be set to the stop price plus/minus an offset. The offset
parameter may be statically set by a trader, or may be dynamically
determined based on how fast the market moves, and in what direction the
market moves at the time when the trigger price is detected. For example,
a positive or negative offset may be added to X to increase the chances
of the order getting filled. If such an offset is used, the money
management module or the trading application may consider the offset in
calculating the profit level associated with the working order.
Alternatively, an offset of zero could be used so that when the market
reaches the stop price, the order is placed at the stop price. Those
skilled in the art will realize that many different variations are
possible as well. For example, instead of placing a limit order, a market
order could be used instead so that once the stop price is detected, the
order is placed at the market price so that in the fast moving market,
the price at which the order is placed on the market may be a few ticks
away from the stop price. In an embodiment when the order is defined as a
market order, the working order indicator may display the profit level as
if the order was to get filled at the stop price rather than any other
price.

[0077]FIG. 6 is a block diagram illustrating a graphical interface 600
for displaying Net P/L levels for a plurality of working orders that a
trader may enter to get out of the trader's position.

[0078] In FIG. 6, let's assume that a trader's buy order having an order
quantity of 30 gets filled at the price of 100 so that the trader's net
position is now 30. Let's then assume that before or after the first
order gets filled, the trader places four sell orders to offset his
current net position of 30. For example, the four sell orders include a
first order having an order quantity of 20 at the price of 101 (20@101),
a second order of 3@102, a third order of 5@103, and a fourth order of
2@104.

[0079] Referring to FIG. 6, the x-axis corresponds to the total P/L
associated with working orders, and the y-axis corresponds to the
quantity. Additionally, each working order is depicted using an
indicator, the length of which corresponds to the order quantity of each
working order. Also, according to an example embodiment, since the
working orders are entered to offset the net position, the first working
order is displayed at the quantity level corresponding to the net
position. For example, even if only one working order has the order
quantity lower than the net position, the top of such a working order
indicator will be displayed at the level of the net position, and the
length of the indicator will correspond to the working order quantity.
Therefore, for example, an indicator 602 corresponds to the first working
order, where the top of the indicator is displayed at the level of the
net position of 30, and the length of the indicator corresponds to the
quantity associated with the first order.

[0080] Additionally, each working order indicator is displayed in relation
to the P/L level. The indicator 602 is plotted at the P/L level of 30
since the first working order corresponds to a price that is one tick
higher than the originally filled order, and one tick movement based on
the total working order quantity of 30 corresponds to the profit tick
movement of 30. Then, assuming that the first working order gets filled,
the total working order quantity would decrease to 10, and each one tick
P/L movement would cause the P/L to move by 10 ticks, respectively.
Therefore, the indicator 604 corresponding to the second order is plotted
at the total quantity level of 10 and the P/L of 40, where the length of
the indictor corresponds to the order quantity of 3. The indicators 606
and 608 are plotted using the same method and correspond to the third,
and fourth orders. Therefore, if all working orders were to get filled,
the trader would realize the P/L of 49.

[0081] In the embodiment illustrated in FIG. 6, the order in which the
indicators are illustrated corresponds to their prices since if the
market sweeps through the working orders, the first order will get filled
before the second order, and the second order will get filled before the
third order, etc. It should be understood, however, that if the order
quantity corresponding to the working orders is higher than the filled
quantity of 30, in this example, the remaining quantity represents the
start of the next net position and may be graphically displayed in
relation to the fourth working order indicator 610. For example, a
graphical indicator with a number corresponding to the remaining working
quantity could be displayed.

[0082] Additionally, it should be understood that a trader could modify,
delete, or add working orders using the graphical interface 600. Each
working order may be associated with an order sending component such as
the one described in relation to the net P/L indicator in FIG. 4. For
example, a trader could modify a working order quantity of each working
order by simply clicking on each working order indicator. In such an
embodiment, a selection of the indicator may enable a display of a
window, via which a trader can change the order quantity and the order
price. Alternatively, a trader could simply drag the length of the
indicator to modify the quantity associated with the order and also drag
the indicator to a desired P/L level location. A trader could also delete
a working order by simply selecting the working order indicator and then
entering a delete selection input, which may include a graphical
identifier or any key combination input.

[0083] A trader could also enter new working orders using the methods
described in reference to FIG. 4, where instead of selecting an area in
relation to the net P/L indicator, the trader could select the area in
relation to one or more working orders. For example, referring to the
example given above, if a trader has a first working order having the
order quantity of 20 at 101, and the second order having the order
quantity of 10 at 103, a trader may input another working order between
the two orders by entering a predetermined selection input, such as
entering a predetermined key combination, or a mouse input, and then
inputting an order quantity via a pop-up window. It should be understood
that once the order is entered, the P/L level at which the order is
entered may be used to determine a price level at which to enter the
order. The price could be determined by reversing the method that was
used to determine P/L levels for the working orders. Therefore, the price
level for a working order may be determined relative to the price of the
filled order, i.e., 100 in this example.

[0084] In one embodiment, once a new working order is entered, and the
total working order quantity is higher than the quantity associated with
the original fill, i.e., 30 in this example, the order quantity of the
original second order may be modified to 5 so that the sum of the
quantities is still equal to 30. Alternatively, the order quantity of the
original second order may remain the same, so that when all working
orders are filled, the trader will end up with a net position of -5,
since the working order is this examples are sell working orders.
Therefore, a trader may input working orders when a fill quantity is
detected for another order so that the working orders are used to exit
the net position.

[0085] Additionally, a working order trade-out mechanism may be provided
so that when a predetermined selection input is detected, and then a
trader selects one of the working order indicators, for example, the
order quantity corresponding to that order could change to a quantity
that is required to get out of the net position. The predetermined
selection input can correspond to a graphical indicator, a key
combination input, or any other input means. For example, if the trader
enables the automatic working order trade-out, the trader can select the
indicator 604, which would then cause the working order quantity of 3 to
be changed to the working order quantity of 10. The working order
trade-out mechanism may then cause the third and fourth orders to be
deleted. Alternatively, the third and fourth order may remain on the
market, but the fill of the orders would result in a non-zero net
position.

[0086] The working order indicators could be also displayed in combination
with the Net P/L indicator and the Realized P/L indicator. FIG. 7
illustrates one example embodiment for displaying a plurality of working
order indicators in combination with a Net P/L indicator and a Realized
P/L indicator.

[0087] The graphical interface 700 displays a Realized P/L indicator 702,
a Net P/L indicator 704 that is based on a market price and the net
position that a trader is holding, so that the indicator 704 moves based
on the market movements. The graphical interface also includes a
plurality of working order indicators 706, 708, 710, and 712. Therefore,
when the market moves to the price level associated with the first
working order 706, and the order gets filled, the Net P/L indicator will
move to the P/L level corresponding to the first order 706. Additionally,
since the net position will be decreased as the result of the fill, the
length of the Net P/L indicator will decrease as well. An example, Net
P/L indicator 714 is displayed to illustrate such an embodiment. It
should be understood that if the market moves to price levels associated
with other working orders, the Net P/L indicator will move to the P/L
positions associated with the orders, and the length of the Net P/L
indicator will decrease respectively. Therefore, once all working orders
get filled, and if the working order quantity is equal to the net
position, the Realized P/L indicator 702 will move to the P/L level
corresponding to the working order indicator 712.

[0088]FIG. 8 is a block diagram illustrating a graphical interface 800
for displaying a plurality of net profit levels based on potential market
movements. More specifically, the graphical interface displays a Net P/L
level indicator 802 associated with a Net P/L level of 390 and a Net
position ("NP") of 50. The graphical display interface 800 displays a
number of graphical indicators associated with a plurality of potential
P/L levels that may result when the market moves against the trader's
position, e.g., as if the trader were to get out of or close his position
at that point in time. As shown in FIG. 8, three potential profit levels
804, 806, and 808 are illustrated based on the market dropping by 1, 2,
and 3 ticks from the current market level, respectively. Using the
potential profit indicators 804, 806, and 808, the trader can easily view
potential profit levels such as if the market was to move against the
trader's position. Thus, for example, if the market moves 1 tick against
the trader's position, the trader's net profit, as shown at 804, will
decrease to 340 (390-current Net P/L minus 50-net position multiplied by
1 tick). Similarly, as shown at 806 and 808, if the market moves 2 and 3
ticks down from the current market level, the trader's net profit will
decrease to 290 and 240, respectively.

[0089] It should be understood that the potential net P/L indicators may
be based on the trader's average loss. In such an embodiment, the money
management module may determine a trader's average loss during a trading
day based on an average number of ticks that a trader tends to lose on
losing trades. For example, the money management module may dynamically
update the trader's average loss during a trading day based on the
trader's performance. Alternatively, the trader's average loss may
correspond to a specific time interval such as the last hour of the
trader's trading. It should be understood that a trader or system
administrator may specify how and based on what time interval the average
loss is calculated. Then, the trader's average loss may be used to
determine another set of potential Net P/L indicators. It should be
understood that many different embodiments are possible as well. For
example, all potential net P/L loss indicators displayed via the
interface 800 may be based on the trader's average loss rather than the
fixed tick loss. For example, the indicator 806 could correspond to a
potential Net P/L determined based on the trader's average loss, the
indicator 804 may correspond to Net P/L determined based on one half of
the trader's average loss, and the indicator 806 may correspond to Net
P/L determined based on twice the trader's average loss.

[0090] The average loss, similarly to the realized P/L level, may be
computed when the trader's net position reaches or crosses the zero
level. It should be understood that different indicators associated with
the trader's loss information can be displayed as well. For example, the
money management module or the trading application could compute a
percentage of losing orders (e.g., orders that resulted in the loss of
profit), and the average cost of each loss, the values of which could be
displayed via the graphical interface 800. Further, as will be described
in greater detail below, trader's average loss could also be used as one
of the factors in determining when the trader is moved to the lower money
management filter.

[0091] As mentioned in earlier paragraphs, the open, net, and realized P/L
level indicators may be displayed in combination with the graphical
display of money management filters so that the trader not only can view
his profit levels but also can quickly and clearly view any trading
constraints (controlling parameters) that he/she might have to use if the
market moves in or against his/her position. According to one example
embodiment, a money management filter may be defined using one or more
filter criteria and filter conditions. For example, filter criteria may
include one or more of the following criteria: Open P/L, Realized P/L,
Net P/L, trader's net position, available credit, a number of
transactions, a transaction/fill ratio, a change in net position, or a
type of tradeable object, and any other trader-related or market-related
data. Further, as mentioned in earlier paragraphs, it should be
understood that the P/L levels associated with filter criteria may be
calculated for a specific tradeable object or a combination of tradeable
objects being traded by a trader.

[0092]FIG. 9 is a block diagram illustrating an example money management
interface 900 that a trader or a system administrator may use to define
filter criteria and filter conditions.

[0093] According to one embodiment, a trader or a system administrator may
define via a profile name window 902 a filter profile that may include a
combination of filters. The filters in the filter profile may be based on
different filter criteria, however, if two or more filters are applicable
to the incoming order, and their filter conditions conflict, the most
conservative filter condition will preferably be used. Alternatively, a
filter may be configured so that only filter conditions associated with
the filter will control order parameters even if another filter
associated with a different set of filter conditions applies. Further,
the profile may be created for a predetermined tradeable object or a
group of tradeable objects being traded by the trader, and the trader may
select one or more tradeable object to be associated with the profile
using a tradeable object pull down menu 904. In the embodiment
illustrated in FIG. 9, the filter criteria 906 are based on the Open P/L
level, and each filter is associated with a P/L threshold level 908 that
then maps to a number of filter conditions including a maximum order
quantity 912 and a maximum net position 914. However, it should be
understood that the filter criteria may be based on the Net P/L level or
a combination of different P/L levels. In addition to each P/L threshold
level, a trader may also define one or more retraction levels that are
configured to limit trader's losses once a trader reaches a predetermined
profit level. It should be understood that the profit levels and
retraction levels may be defined using many methods. For example, the
profit levels and retraction levels may be defined in ticks or currency,
and the retraction levels could also be defined as a percentage of the
maximum P/L.

[0094] Referring to the example in FIG. 9, when a trader reaches the Open
P/L level of 10, the trader may trade the maximum order quantity of 5 and
may hold the maximum net position of 10. As mentioned earlier, the net
position may be determined using different methods, and a trader or
system administrator may define which orders are taken into consideration
to calculate the net position. As shown in FIG. 9, once the trader's open
P/L reaches the value of 10 and then falls to the level of 7, as shown in
the retraction level column 910, the trader's ability to trade is limited
to the order quantities of 3 and the maximum net position of 6. Referring
to the next retraction level under the same Open P/L threshold level,
when the trader's Open P/L reaches the level of 5, the trader is limited
to trade order quantities of 3 to trade down to the position of 0.

[0095] Once a trader creates a filter profile, the trader may save the
profile by simply selecting a save selection input 916. Alternatively,
the trader may quickly delete the profile by selecting a delete selection
input 918. Further, alternatively, the trader may quickly exit the money
management setup interface 900 by selecting a cancel selection input 920.
Once the filter profile is saved, the trader may easily retrieve and edit
the profile's filter criteria and conditions by selecting the profile's
name using the pull down profile menu 902. In one embodiment, when a
system administrator configures money management filters for a group of
traders, the system administrator may set up authorization rules defining
one or more traders or system administrators who can create, edit,
enable, disable, or reset limits created for the group of traders.

[0096] Filter selection may be modified based on the trader's performance
such as a percentage of losing trades, or average cost of all losses
incurred by a trader during a trading day. In one example embodiment, in
addition to selecting a specific filter for a trader based on a trader's
P/L level and other parameters described above, the money management
module may monitor a number of losing trades associated with the trader
when the trader is being controlled by a predetermined filter and then
use that number as a filter selection overriding mechanism. For example,
a trader may configure a number of losing trades that a trader may incur
while being controlled by a specific filter. In such an embodiment, if a
trader's P/L level drops to a level that should enable a more restricting
filter, and the number of trader's losing trades while the trader's was
controlled by the higher filter was lower than the configured value,
then, the less restricting filter may still control the trader's trading
until another losing trade is detected, for example. In one embodiment, a
number of losing trades that would allow a trader to remain under the
control of the less restricting filter could be user configurable.

[0097] It should be understood that other filters could also be used, and
additional filters have been described in greater detail in U.S. patent
application Ser. No. 10/355,471, filed on Jan. 31, 2003, entitled "System
and Method for Money Management in Electronic Trading Environment," the
contents of which are fully incorporated herein by reference.

[0098] Once a trader defines one or more money management filters, the
trader may view the trader-related data as well as any filter conditions
being currently imposed on each tradeable object via another graphical
interface. FIG. 10 is a block diagram illustrating a monitoring interface
that allows a trader to view market conditions and limitations imposed on
each tradeable object or a group of the tradeable objects associated with
the created filters. As shown in FIG. 10, the money management monitoring
interface 1000 displays a name of each profile 1002, a name or names of
tradeable object(s) 1004 associated with each profile, "limits on"
indicators 1006 that may be used to enable filters for the specific
tradeable object, a quantity associated with working orders 1008, a
trader's net position 1010, a maximum P/L 1012 and a minimum P/L 1014
determined for a trader during a trading day, a current P/L 1016, as well
as effective current limits 1018 including a maximum net position and a
maximum order quantity that are currently imposed on a trader based on
the trader's current P/L level. It should be understood that when a
profile is created for more than one tradeable object being traded by a
trader, the current P/L 1016 may display the P/L level associated with
each tradeable object as well as the combined P/L level associated with
all or some tradeable objects in the profile. It should be understood
that the current P/L 1016 can be associated with any P/L specified by the
trader such as an Open, Realized, Net P/L level, or the combination
thereof. It should be understood that a trader may add or delete columns
in the money management interface 1000 and specify which of the described
or additional parameters are to be displayed via the interface.

[0099] According to an example embodiment, trader's profit related
information as well as filter related information may be displayed to a
trader via a single graphical interface. FIG. 11 is a block diagram
illustrating a graphical interface 1100 that displays trader related P/L
information in combination with money management filter related data. The
graphical interface 1100 displays a number of filter triggers 1126
associated with a plurality of P/L trigger levels that, in this example,
are associated with Net P/L trigger levels. According to an example
embodiment, each P/L trigger level maps to one or more filters defining a
maximum order quantity and a maximum net position. More specifically, and
as illustrated in FIG. 11, when a trader's Net P/L reaches one of the P/L
triggers 1126, the trigger corresponding to the trader's Net P/L level
may be highlighted so that the trader can easily tell which filter level
or filter band is used to currently control the trader's trades.

[0100] When the trader reaches one of the predetermined P/L level
corresponding to the triggers 1126, the graphical interface 1100 may
display via a money management filter region 1104 one or more filters
corresponding to that P/L trigger. As illustrated in FIG. 11, the P/L
trigger level of 300 corresponds to four filters including the main
filter 1128, and three loss-limiting filters 1130, 1132, and 1134. The
main filter 1128 controls the orders being sent by a trader to an
exchange when the trader's open P/L level is between 300 and 450 profit
levels. More specifically, the filter 1128 limits the order quantity that
a trader may submit to the exchange to the maximum order quantity of 44,
and further limits the trader's net position to the maximum net position
of 88. However, if the trader's profit level does not reach the higher
profit trigger, e.g., 450 in this example, and instead drops to the
profit level lower than 300, then one of the loss-limiting filters
corresponding to the Net P/L trigger level of 300 controls the trader's
orders. For example, if the trader's Net P/L drops to a profit level
between the 200 and 300 profit range, filter conditions associated with
the filter 1130, e.g., a maximum order quantity of 31 and a net position
of 62, may control the orders being sent by the trader. Similarly, when
the trader's profit is in the profit range of 200 and 150, filter
conditions associated with the filter 1132, including a maximum order
quantity of 24 and a maximum net position of 48, control the trader's
orders being sent to the exchange. Finally, when the trader's profit
level reaches the profit level below 150, the trader is limited to the
order quantity of 16 and a net position of 0 so that a trader is forced
to trade out rather than to submit orders that increase the trader's net
position.

[0101] It should be understood that once a trader is in a predetermined
filter band, such as the one shown in FIG. 11, the trader's trading is
controlled by the filter conditions of that band. In the example
embodiment of FIG. 11, once a trader reaches the P/L of 450, filters
1128, 1130, 1132, and 1134 associated with the filter trigger of 450 may
control the trader's trading. Similarly, once the trader's P/L drops to
the P/L level of 180, the trader's trading will be controlled by the
filter conditions associated with the filter 1132 rather than some other
filter that is associated with a different band and having the same P/L
level as one of its filter criteria.

[0102] Additionally, it should be understood that the present invention is
not limited to the graphical interface described in reference to FIG. 11.
Alternatively, instead of displaying a plurality of filters within the
money management region 1104, the money management region 1104 may be
color-coded so that, for example, different colors or different shades of
the same color correspond to different sets of money management
parameters, such as different maximum order quantities and maximum net
positions. Different embodiments are possible as well.

[0103] According to one embodiment, in addition to selecting applicable
filters based on the profit levels, other methods may be provided to a
trader to further control filter selection. One example method is a
permanent pullback that prevents the trader from advancing to a higher
filter once the trader drops to the lower one. To illustrate the
permanent pullback option, lets assume that the trader's trades are being
initially controlled by the filter 1130, and then the trader starts
losing money and drops down to the lower filter such as the filter 1132.
With the permanent pullback enabled, even when the trader advances back
to the profit level associated with the filter 1130, the trader is still
limited by the filter conditions associated with the filter 1132.

[0104] In one embodiment, even with the permanent pullback enabled, a
trader may be able to advance to a higher filter only when the trader
gets to a profit level that advances the trader to another filter band,
such as P/L of 450 in FIG. 11. It should be understood that two
indicators associated with the permanent pullback option and the band
advance option may be displayed to a trader when the filter configures
filter parameters via a filter configuration window. However, it should
be understood that a trader may enable the permanent pullback at any time
during trading as well. Additionally, it should be understood that the
permanent pullback could be disabled at other times of the trader's
trading, such as when the trader advances a predetermined number of
filters within the filter band.

[0105] In addition to displaying a number of money management filters, the
money management region 1104 also displays profit indicators that are
dynamically updated during a trading day to reflect current profit levels
associated with the trader. It should be understood that a trader may
select which of the profit indicators are displayed via the money
management filter region 1104. FIG. 11 illustrates two P/L indicators
including a Net P/L indicator 1124 and a Realized P/L indicator 1122 that
are dynamically updated throughout the trading day upon detecting a
change in the corresponding profit levels. As shown in FIG. 11, the
Realized P/L is at 175, and the Net P/L is at 400. It should be
understood that a trader may configure graphical representation of each
profit indicator, such as the shape or color of each indicator, so that
the trader can easily distinguish between the two or more indicators.

[0106] Also as shown in FIG. 11, the profit indicators correspond to a
predetermined tradeable object, here the tradeable object XS 1102.
However, alternatively, additional profit indicators could be displayed
via the money management region 1104, such as overall profit indicators
determined based on P/L levels associated with all or some tradeable
objects being traded by the trader. Further, as explained in reference to
FIGS. 6 and 7, the money management filter region 1104 could also display
a plurality of P/L indicators determined based on working orders that a
trader has on the market. It should be understood that if a trader has a
large number of working orders on the market, the potential profit levels
associated with those orders may be combined and displayed using a single
P/L indicator.

[0107] The graphical interface 1100, in addition to the graphical
indicators, may also display a number of numerical indicators. As
illustrated in FIG. 11, the indicators include a working buy order
indicator 1106 that displays a working buy quantity of 20, a working sell
order indicator 1108 that displays a working sell quantity of 0, and a
trader's net position 1110 that displays a trader's net position of -20.
In addition to displaying P/L levels using graphical indicators, the P/L
levels may be displayed using numerical P/L indicators 1112. The P/L
indicators 1112 correspond to the Net P/L levels and include the maximum
Net P/L level of 414 that the trader has held during the trading day, the
minimum Net P/L level of -249, and the current Net P/L level of 400. It
should be understood that the profit levels may be distinguished using
different colors or graphical indicators.

[0108] It should be understood that the graphical interface could also
display numerical indictors related to other types of P/Ls such as
Realized and/or Open P/L levels. As illustrated in FIG. 11 at 1114 and
1116, instead of defining one maximum order quantity, each filter may be
associated with different maximum order quantities depending on whether a
trader submits a buy or sell order. The graphical interface 1100 may also
display numerical indicators 1118 and 1120 associated with the maximum
order quantity and the maximum position that a trader may hold based on
the trader's current profit level. In FIG. 11, numerical values for the
indicators 1118 and 1120 are determined based on the trader's net P/L
level associated with the tradeable object XS 1102. However, it should be
understood that the values may be determined based on any
user-configurable profit level associated with one or more tradeable
objects being traded by one or more traders.

[0109] A trader may also use the money management filter region 1104 for
filter configuration purposes. For example, when the graphical interface
1100 is opened for the first time, the money management filter region
1104 can display a plurality of default filter/money management regions
such as the regions 1128, 1130, 1132, and 1134. Then, a trader may click
on each of the regions to configure the maximum order quantity, the
maximum net position, and the profit range for each of the regions. In
one embodiment, a trader may simply change default values being displayed
in association with each filter to desired values. Alternatively, a
trader may click on the filter region, and a pop-up window could be
displayed via which a trader may enter filter criteria and conditions for
one or more filters. In another embodiment, a trader may configure the
filters using a configuration interface such as the one illustrated in
FIG. 9, for example, and once the configuration is finished, the
configured filters may be displayed via the money management filter
region 1104. Alternatively, a trader may simply drag the boundaries of
each filter region to desired locations corresponding to a predetermined
profit range, as well as a maximum order quantity and a maximum net
position.

[0110] Alternatively, a configuration selection input may be displayed on
the graphical interface 1100 that, when selected, may invoke another
window via which the trader can configure a number of filters for each of
the trigger levels. FIG. 12 is a block diagram illustrating an example
graphical interface 1200 via which a trader can configure a plurality of
filters for each of the P/L trigger levels. The graphical interface 1200
may be invoked when the trader specifies P/L trigger levels via the
graphical interface 1200 and then selects a configuration selection input
to configure a plurality of money management filters for each of the
levels, for example. The graphical interface 1200 displays only three P/L
trigger levels; however, it should be understood that a trader could
specify more or fewer trigger levels. Each profit level may be displayed
in association with a plurality of default filter regions 1202, 1214, and
1224, and a trader may configure numerical values for each filter
criteria and filter conditions by simply modifying default values being
displayed in association with each filter to the desired values, or by
dragging the edges of each filter to the desired profit, quantity and net
position levels.

[0111]FIG. 12 illustrates three profit trigger levels including P/L
trigger levels of 150, 300, and 450, respectively. Each of these P/L
trigger levels is then associated with a plurality of filters, so that,
for example, the P/L trigger 450 is associated with five filters 1204,
1206, 1208, 1210, and 1212, and the P/L triggers 300 and 150 are
associated with four filters each, 1216, 1218, 1220, and 1222 for the P/L
trigger 300, and filters 1226, 1228, 1230, and 1232 for the P/L trigger
150. However, it should be understood that more or fewer filters could be
configured for each P/L trigger level. For example, a trader may simply
select an add selection input 1234, 1240, or 1246 being displayed in one
of the P/L trigger regions to add another filter to that P/L trigger
level. Similarly, a trader may delete one or more default filters by
first selecting a default filter block in the P/L trigger region 450, and
then selecting a delete selection input corresponding to that region,
such as one of the delete selection inputs 1236, 1242, and 1248. Once a
trader configures all filters for a P/L trigger, the trader can then save
the filters by simply selecting a corresponding save selection input such
as one of the save selection inputs 1238, 1244, or 1250, respectively,
depending on which P/L trigger level the filters correspond to.

[0112] The money management filters are not limited to the filters
described above, and more or fewer filters could be created for a
tradeable object. Some of the additional filters may be time-based so
that they are triggered at specific time periods. In addition to time
being a trigger, the time-based filters may also have other triggers,
such as triggers related to trader data, exchange data, or data from
outside sources. For example, a set of time-based filters may be created
to complement any other filter conditions when a predetermined time
period is detected. In such an embodiment, when two or more filter
conditions conflict, the more conservative one will control. For example,
a time-based filter, such as a filter effective between 8 a.m. and 9
a.m., may be triggered upon receiving an employment number. Once the
employment number is detected, the filter may prevent the trader from
trading or limit the trader to trading very small order quantities. In
one embodiment, time-based filters may be configured to completely
overwrite any other filter conditions for the time period associated with
the time-based filter. It should be understood that different outside
triggers could also be used in addition to the employment numbers. For
example, during the last twenty minutes of trading before the market
closes, any filters that are applied to trader's orders may be overridden
or supplement by filter conditions of another set of filters created for
the market closing time period. Such filters may be designed so that the
trader completely trades out of his positions.

[0113] In one embodiment, a graphical interface, in addition to the
applicable filter band and P/L indicators, could also display indicators
associated with time-based filters. FIG. 13 is a block diagram
illustrating a graphical interface 1300 for displaying a money management
filter band in combination with P/L indicators and time-based filter
indicators. The graphical interface 1300 includes a time-based filter
region including a plurality of time-based filter indicators 1304, 1306,
and 1308. For example, the first indicator 1304 may correspond to an
employment number filter, the second indicator 1306 may correspond to one
or more filters that are triggered based on some news event, and the
third filter 1308 may correspond to the market closing time-based filter.

[0114] It should be understood that each filter may be labeled with an
indicator defining the type of the filter, and the time-based filters may
overlap. When the time-based filters overlap, the most conservative
conditions may be control the order parameters. Alternatively, if there
is more than one filter that controls order parameters at any given time,
a trader or a system administrator may control which one of them will be
applied to orders being sent to the exchange. For example, each filter
may be assigned a predetermined priority level so that when more than one
filter is applicable during a predetermined time period, only filter
conditions associated with filters having the same priority levels are
merged. It should be understood that different methods for determining
which filter conditions should apply at any given time period could also
be used, and the present embodiments are not limited to labeling each
filter with a priority level. Further, other filters could be created to
turn all filter restrictions off for a predetermined time period so that
a trader can trade any order quantities and can hold any net position
that the trader desires during the time period defined by the order.

[0115] It should be understood that time-based filters may be configured
using the methods described above, and each time-based filter may be
associated with one or more filter bands including one or more filters.
Additionally, once the time-based filter is triggered, the time-based
filters may be displayed via the money management window so that the
trader may quickly and easily view the applicable filters. In one
embodiment, the time-based filter may be superimposed over any other
filters displayed via the interface such as in the embodiment illustrated
in FIG. 13, where the time-based filter 1310 is displayed in combination
with other applicable filters. It should be understood that different
configurations are possible as well, and a trader may configure the
interface so that only the most conservative of the applicable filters is
displayed via the interface, or when the filters are superimposed, the
overlay of the filters can be shaded so that the trader can easily view a
maximum order quantity and a maximum net position for different profit
ranges.

[0116] Once the filter conditions such as the maximum order quantity and
the maximum net position are configured, a trader or a system
administrator may verify the filter conditions by applying different drop
off loss conditions to the created filter. FIG. 14 is a graphical
interface 1400 that may be used for verifying and changing filter
conditions configured by a trader or a system administrator using
different potential profit loss conditions. The graphical interface 1400
includes a money management filter window that displays a plurality of
money management filters 1404, 1406, 1408, and 1410 created for a trader
or a group of traders trading a tradeable object XS 1402. Once the
filters are displayed, a trader or a system administrator may enable a
display of potential profit indicators to verify if the filters have been
set up according to his/her needs. For example, in FIG. 14, a plurality
of one-tick potential profit loss indicators 1412, 1416, 1418, and 1420
are displayed, and the slope of each indicator is determined based on a
single tick loss (a number of contracts*tick loss per contract) so that,
for example, referring to the first filter, a one tick profit loss for 50
contracts corresponds to 50 ticks of P/L loss, as shown on the x-axis. It
should be understood that even though the slope corresponding to a one
tick loss should be 1:1, the slope of the displayed potential profit loss
indicators, as illustrated in FIG. 14, is not a 45-degree line since the
scales on the two axis corresponding to the quantity axis and the profit
level axis are different.

[0117] Referring to FIG. 14, the indicator 1412 corresponds to a one tick
profit loss and may be used by a trader or system administrator to
determine if the set filter configurations are what the trader really
anticipated. For example, based on the indicator, the trader may quickly
determine that a loss of one tick at the net position of 50 will result
in the trader's dropping out of the first filter associated with the
maximum net position of 50 and the maximum order quantity of 30. If this
is what a trader desires, the trader may leave the filter configuration
unchanged. Alternatively, the trader may increase the profit range
corresponding to the filter 1404 so that a higher loss is allowed before
another filter such as the filter 1406 controls the trader's trading.

[0118] The indicator 1412 could also be used to visually and quickly
determine what would happen at other net positions levels. For example,
as shown in FIG. 14, if the trader's Realized P/L level were at 500 and
the trader then trades so that his/her net position becomes 45, the
trader can easily determine that a loss of one tick (Δ1) would keep
the trader in the same filter, however, a loss of two ticks (Δ2)
would move the trader to the second, more restricting, filter 1406, where
the trader's maximum order quantity and net position would be lowered to
20 and 40, respectively.

[0119] Similarly, referring to the filter 1406, the indicator 1416 also
corresponds to one tick loss, and as shown in FIG. 14, if the trader's
net position were 15, the trader would be allowed to lose about 5 ticks
before his trades would be controlled by less favorable filter conditions
of the filter 1408. It should be understood that the profit loss
indicators are not limited to the one tick loss indicators, and the
indicators could be based on any number of ticks, such as 2, 3, 4, and
could be user-configurable. Alternatively, the money management
application or the trading application may determine an average tick loss
associated with the trader's trades, and another indicator associated
with the trader's average tick loss may be displayed in addition to any
other indicators. It should be understood that the indicators may be
distinguished using different colors or different indicator types that
could be user-configurable.

[0120] In addition to verifying filter configurations during filter set
up, the profit loss indicators may be used to provide a trader with a
quick indication of a potential risk before a trader enters into any
position. According to one embodiment, a potential profit loss indicator
may be displayed to a trader in relation to the Realized P/L indicator.
Further, the indicator may be displayed when the money management
application detects that the trader's net position is equal to zero, so
that before the trader decides to enter any new orders, the trader can
quickly view his/her potential risk based on different potential order
quantities.

[0121]FIG. 15 is a block diagram illustrating an interface 1500 that
displays potential profit loss indicators in relation to a trader's
Realized P/L indicator. The interface 1500 displays a money management
window 1504 including a plurality of money management filters 1506, 1508,
1510, and 1512. Further, the money management interface 1500 displays a
profit loss indicator 1514 in relation to the Realized P/L indicator
1516. In one embodiment, the indicator 1514 may be displayed to a trader
when the trader's net position is flat so that before a trader enters any
new orders, the trader can easily view his potential profit losses based
on the order quantity that the trader is planning to trade. Further,
using the indicator 1514, the trader may easily predict his potential
filter drop, e.g., a filter that would control the trader's trades, if
the market goes against his position. It should be understood that in
addition to showing the potential profit loss indicators, such as the
indicator 1514, the graphical interface 1500 could also display
indicators related to positive market movements, e.g., indicators
corresponding to the potential profit gain rather than loss. In such an
embodiment, for example, a one tick potential profit gain indicator could
be displayed, where the indicator's slope would be negative, rather than
positive as in the indicator 1514.

[0122] Referring to FIG. 15, the Realized P/L indicator corresponds to a
current Realized P/L level of 460, and the profit loss indicator 1514 may
be used to determine where the trader's profit would be and what filter
would control the trader's trading if the trader were to enter into a
position between 1 and 50 as defined by the first filter. For example, if
a trader enters one or more orders so that a trader's net position
becomes 45, a trader is risking a drop to the third filter 1510 and a
loss of 90 ticks if the market were to move two ticks against the
trader's position. Further, for example, the trader can easily determine
that keeping the net position of 30 rather than 45 would result in a much
smaller risk and much smaller profit loss. First the loss of two ticks
would cause the trader's trading to be controlled by the second filter
1508 rather than the third filter 1510, and the P/L loss that the trader
would incur would be much lower compared to the loss of two ticks when
the trader's position is 45. However, rather than viewing potential P/L
in terms of losses, a trader may view potential P/L in terms of profit
gains so that the higher net position would result in much higher profit
gain compared to the lower potential net position. Therefore, another set
of potential gain profit indicator could be displayed in addition to
potential loss indicators for a plurality of market movements.

[0123] In addition to the maximum order quantities and maximum net
position associated with each filter, a trader or an administrator may
create a plurality of trade-out exceptions to enable a trader to exit his
open positions. Such exceptions may be used when the market moves against
the trader's position causing the trader's orders to be controlled by a
filter associated with a maximum net position that is significantly lower
than the position being currently traded by the trader so that the trader
is forced to lower his position by selling or buying until he reaches the
maximum net position, for example.

[0124] To illustrate one example trade-out mechanism, let's assume that at
time to, a trader is holding a net position of 40 and has no working
orders on the market, and the money management filter that controls the
trader's orders based on the trader's current open P/L level, for
example, is associated with a maximum net position of 50, and a maximum
order quantity of 15. Then, let's assume that at time t1, the market
moves against the trader position, causing the trader's orders to be
controlled by a different filter associated with a maximum net position
of 15, and a maximum order quantity of 7. However, because the trader's
net position of 40 is much higher than the maximum net position of 15
associated with the current filter, the trader will not be able to send
orders to the market quickly enough to get out of his position in case of
unfavorable and fast market movements. In such an embodiment, a set of
trade-out rules may be created to enable a trader to lower his position
to the one specified by the controlling filter. Such overriding rules may
be automatically enabled whenever a limit condition such as the one
explained above is detected. Alternatively, a user selection input may be
displayed to a trader when such a condition is detected, and the trader
may enable the trade-out mechanism by selecting such a selection input.

[0125] According to one example embodiment, a trade-down quantity may be
first calculated to enable a trader to trade down to the maximum net
position associated with the current filter. The trade-down quantity may
be calculated by first subtracting the current trader's position from the
maximum net position associated with the filter, and then taking the
absolute value of the result, which in the example presented above would
be |15-40|=25. Then, the trade-out quantity may be determined by taking
the maximum of the absolute value calculated above and the maximum order
quantity associated with the filter, which would be 25 in the above
example, i.e., max (25,7). Therefore, using such a mechanism, the trader
can submit a sell order of 25, which when filled, would cause the
trader's net position to reach the maximum net position of 15.

[0126] Another rule may be created if the trader wants to trade down to
zero when the trader has the working order of 25 pending on the market.
Once again a user selection input may be provided via the interface to
enable the trader to select such an option. The maximum trade-down to
zero quantity may be determined by taking the minimum of the working
quantity (25 in this example) and a difference between the trader's net
position (40) and the working quantity (25), thus, taking minimum (25,15)
in this example, which is 15. It should be understood that different or
equivalent trade-out mechanisms could also be used, and the present
invention is not limited to the embodiment illustrated above. Further,
for example, a set of rules may be created limiting price levels at which
a trader can place the trade-out orders on the market.

[0127] It should be understood that the above description of the preferred
embodiments, alternative embodiments, and specific examples, are given by
way of illustration and should not be viewed as limiting. Further, many
changes and modifications within the scope of the present embodiments may
be made without departing from the spirit thereof, and the present
invention includes such changes and modifications. For example, the
present invention is not limited to the filter configurations described
hereinbefore, and those skilled in the art will understand that different
configuration methods could also be used.

[0128] Further, it will be apparent to those of ordinary skill in the art
that methods involved in the system and method for displaying money
management related information in an electronic trading environment may
be embodied in a computer program product that includes one or more
computer readable media. For example, a computer readable medium can
include a readable memory device, such as a hard drive device, CD-ROM, a
DVD-ROM, or a computer diskette, having computer readable program code
segments stored thereon. The computer readable medium can also include a
communications or transmission medium, such as, a bus or a communication
link, either optical, wired or wireless having program code segments
carried thereon as digital or analog data signals.

[0129] The claims should not be read as limited to the described order or
elements unless stated to that effect. Therefore, all embodiments that
come within the scope and spirit of the following claims and equivalents
thereto are claimed as the invention.